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Geely to make 300,000 Volvos a year in China

Geely aims to manufacture 300,000 cars a year in China, but intends to keep Volvo’s Swedish operations intact, according to plans the company has presented to Chinese authorities.

Geely to make 300,000 Volvos a year in China
A worker at a Geely factory in Ningbo that may produce Volvo cars in the future

Geely said it plans to make Volvo profitable by 2011 by producing large numbers of cars at a factory in Beijing, but still wants to keep Volvo Cars’ production facilities, head office, and development division in Sweden.

The plans are contained in a document which Geely has handed over to Chinese authorities who must approve the deal, the Reuters news agency reports.

The Chinese automaker expects to complete an initial agreement to buy Volvo Cars from Ford in February, and to have the deal finalized by May.

The price is expected to be between $1.5 and 2 billion, according to Reuters.

The document given to Chinese authorities includes plans for Geely to build a new factory near Beijing with the capacity to produce 300,000 Volvo-branded vehicles a year.

While Geely wants to keep the “core value” of Volvo’s brand unchanged, it will seek to improve it “with the development in emerging markets” and by adding “fashionable, dynamic and passionate international elements”.

On Tuesday afternoon, a group of representatives from four different unions from Volvo Cars in Gothenburg, as well as a compensation consultant, departed for Shanghai.

“We hope to get answers to a lot of questions they haven’t answered yet, like how the financing looks for operating Volvo into the future. And we also want a promise that development and manufacturing will remain in Gothenburg,” Mikael Sällström, chair of Volvo’s IF Metall chapter, told the TT news agency.

Unions have previously expressed their concerns about Geely as Volvo’s new owner, both due to fears about jobs moving to China and because of the risk that suppliers may restrict Volvo’s access to the latest technology due to fears that it will be copied

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CHINA

Sweden’s Volvo Cars may merge with Chinese owner Geely

Sweden's Volvo Cars and its Chinese owner Geely announced on Monday that they are considering merging into a single group in order to share resources, but would preserve their separate brands.

Sweden's Volvo Cars may merge with Chinese owner Geely
File photo of a Volvo test-drive. Photo: Christine Olsson / TT

The merged firm “would have the scale, knowledge and resources to be a leader in the ongoing transformation of the automotive industry,” they said in a statement.

“The combination would preserve the distinct identity of each of the brands Volvo, Geely, Lynk & Co and Polestar,” they added.

Geely bought Volvo in 2010 from Ford which hadn't been able to turn around the Swedish automaker. But under the Chinese firm Volvo has rebounded and smashed its sales records.

Volvo sold more than 705,000 vehicles in 2019, besting the record it set in 2018 by 10 percent, and the automaker expects continued growth this year.

The statement said the firms would create a joint working group to prepare a proposal for the boards of both firms.

“A combined company would have access to the global capital market through Hong Kong and with the intention to subsequently list in Stockholm as well,” it added.

Volvo put off a share listing in 2018 due to tensions in global markets.

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